Newspaper article

Lessons to Learn from Dayton Brothers' Fateful Decision in St. Paul

Newspaper article

Lessons to Learn from Dayton Brothers' Fateful Decision in St. Paul

Article excerpt

The St. Paul Macy's department store, which began life as Dayton's, morphed into Marshall Fields and finally acquired its current name, is closing. This isn't surprising. St. Paul pitched in to help Target Corporation remodel the store on the condition that it remain open for 10 years, and on Jan. 1 time ran out.

Unfortunately, this isn't just a 10-year story of decline but the end of a 50-year effort to keep a major department store afloat in downtown St. Paul. It involves some broad national trends in retailing along with some Twin Cities history.

As I described in earlier columns - here and here - American mass retailing took shape between 1880 and 1920 with the development of department stores, mail-order houses and chain stores.

The key feature of this system was centralization. In particular, department stores located in central business districts so that customers could travel via public transportation and goods could be delivered via railroads and short-haul cartage.

Private automobiles and the growth of trucking upended these arrangements starting in the 1920s. Customers now drove themselves to stores instead of taking public transportation or waiting for packages in the mail. Further, suppliers could ship goods by truck rather than rail, increasing the flexibility of retailers to locate their stores wherever they wished. So the advantages of department stores in urban centers and mail-order houses eroded and a new retail landscape developed.

The decentralization of retailing accelerated after World War II with the spread of strip malls, enclosed shopping centers and big box stores, all surrounded by ample free parking.

Dayton's comes to St. Paul

The story of the St. Paul Macy's can be traced to the early 1950s.

"On April 1, 1950, five brothers - Don, Bruce, Wally, Ken, and Doug - inherited equal shares of the controlling block of common stock of the Dayton Company. At the time Sears, Roebuck was 40 times larger than Dayton's."

Thus begins "The Birth of Target" by Bruce B. Dayton and Ellen B. Green. In 132 pages, they tell the story of how the Dayton Company, which began with just a single store in downtown Minneapolis, evolved into Target Corporation.

Back in the 1950s, the brothers soon decided that they wanted to be more than just a local department store. They started meeting on Saturdays over lunch to make long-term plans. Over the next few years, they came up with a four-part strategy:

1. Make the downtown Minneapolis store the premier retailer in the Twin Cities. They did this through offerings in clothing and home furnishings that combined value, high quality and leading-edge design.

2. Expand into other cities outside of Minneapolis. They did this by purchasing existing department stores, first in Rochester (Knowlton's in 1952), then in Sioux Falls (Fantle's in 1954), and finally in St. …

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